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Interview with Jami Hossain who is the Chief Mentor & Co-founder Windforce. He is Currently on the National Council of Indian Wind Power Association , Governing Council of Indian Wind Energy Association and Treasurer of World Wind Energy Association

An interview with Jami Hossain who is the Chief Mentor & Co-founder Windforce. He is Currently on the National Council of Indian Wind Power Association , Governing Council of Indian Wind Energy Association and Treasurer of World Wind Energy Association .

Q)Do you think time has come when RE power in India could compete with

conventional power without Govt support?

Ans) The answer to this question cannot be very simple ‘yes’ and ‘no’.

We must understand why we need government support. Is it because RE

Power is costly with respect to conventional power such as coal? If we

delve deeper into the issue, we will find that in the long-term cost

and price are a function of governmental policies on various fronts.

For example in any country if the import duty on iron ore is less, we

may have cheaper wind turbines getting manufactured. Similarly, if

government was to impose a certain charge or tax on mining or

extraction of different materials from the surface of Earth, coal will

become costlier and then if there is a further charge due to pollution

and environmental hazards created by combustion of coal, the power

generated from it will be still costlier and then RE power will become

more competitive. These policies have to be driven by certain

environmental and societal rationality, which is not the case today.

Coming to the question, the government support comes in two forms 1)

in the form of policy and regulatory frameworks, which create an

enabling environment for RE projects to come up, and 2) In the form of

tax benefits and subsidies etc. Support of the first kind will

undoubtedly needed on an ongoing basis. The second kind of support

directly to a private sector beneficiary is sometimes difficult to

manage. However, fiscal support in the form of taxation policy or

interest subsidy etc., which can be managed, should be made available

to RE power.

At the same time, in the case of grid connected RE power, restrictive

practices and charges such as cross-subsidy charge imposed on third

party sale of electricity, open access charges, banking and wheeling

charges etc. should be done away with. Government should come in to

meet the cost of setting up and operating transmission systems and

such costs, as far as RE power is concerned, should neither be loaded

on utilities nor on the RE power generators. Such support will be

needed till the entire electricity sector starts to function under a

sound environmental and societal rationality.

In India, when we talk of government support to RE power, we should

also keep in mind that over the last sixty years, the government has

not only consistently supported conventional power such as

mega/ultra/super sized coal based power plants, large hydro projects

and nuclear projects but also has completely sponsored and facilitated

development such projects.

This has lead to physical and organizational infrastructure as well as

a mindset that on the one hand minimizes barriers to conventional

power and on the other hand imposes barriers on RE power. An example

is the power grid, which emanates from large centralized power plants

and so called central generating stations and is meant to transmit

power from these stations but the RE power is generated in a

geographically distributed and dispersed manner. There is sparse power

evacuation infrastructure to tap distributed generation. This creates

a great disadvantage for RE power.

The other aspect is the mindset that the electric power that utilities

can manage is only the power from large coal, hydro and nuclear power

plants and this mindset is so overwhelming that a twisted sense of

rationality prevails among the policy makers and policy making bodies

which prevents mainstreaming of RE power.

Till there is a level playing field not only in terms of costs and

prices but also in the form of organizational and physical

infrastructure and the mindset, government support will be needed.

Q) Regulators are currently contemplating to take away accelerated

depreciation benefits for wind projects, what do you think will be

impact of such action on wind energy growth?

Ans) Unfortunately, the move to do away with accelerated depreciation

is again coming from this twisted sense of rationality. If today we

have 17000 MW of wind power connected to the grid, it is almost

entirely due to accelerated depreciation. The policymaker is of the

opinion that end of accelerated depreciation will bring in IPPs.

However, the ground reality is different and the space left by

accelerated depreciation investors cannot be filled in by IPPs. The

move will harm the industry that according to some estimates employs

100,000 people. Given the fact that there is a vast potential for

wind power in the country and that options of capacity addition for

the country are limited, the government should not only allow

accelerated depreciation to continue but also come up with policies

that remove barriers to investments in RE power.

Q) There has been reluctance shown by investors to fund REC based

projects, how do you think what Govt could do to alleviate risks for

investors for such projects?

Ans) The REC based projects are being set up on the premise that it

will be possible to sell these certificates to entities that need to

meet their RPO requirements. The investors can take this mechanism

seriously only if the meeting of RPO requirements is made legally

binding and if strong penalties are imposed for non-compliance.

Q) Is there any impact of European economic situation on wind projects

in India as well as globally?

Ans) There can be a short-term impact on investments due to European

economic situation. We need to understand that the flight of the

capital can take place because the problem is more in the mind of the

investor as a risk perception rather than actually a real problem on

the ground. This risk perception can be addressed by strengthening and

improving upon investment enabling environment in the country. At the

end of the day “capital” has to be invested and if the risks are

minimized, it can flow to the projects. Therefore, the European crisis